Gillian Tan is a Bloomberg Gadfly columnist covering deals and private equity. She previously was a reporter for the Wall Street Journal. She is a qualified chartered accountant.

(Corrected )

President-elect Donald Trump seems to be doing all he can to revive Goldman Sachs Group Inc.'s crisis-era nickname, Government Sachs

Early Wednesday, the incoming administration decided to nominate former Goldman partner Steven Mnuchin as Treasury secretary, some two weeks after it appointed another Goldman alum, Steve Bannon, as chief strategist. Separately, Politico reported that Trump was considering tapping Gary Cohn, Goldman's president, chief operating officer and second-in-command, for a senior role, potentially as director of the Office of Management and Budget. The Trump transition team later confirmed the president-elect was considering Cohn to head the White House budget office or for other positions. 

It's understandable if Cohn decides to pursue a move to Washington. He's been at Goldman since 1990 and has been viewed to be next in line for the top job for longer than he may have anticipated. The 56-year-old has now served as deputy to CEO Lloyd Blankfein for a decade and was described in a 2013 New York Times article as the "Prince Charles of Wall Street, a man for whom the crown seems just beyond his grasp." Signs that he's tiring of playing second fiddle are showing: He's had conversations in recent months about leaving the bank, The Wall Street Journal reported Wednesday. 

Cohn's exit would force Goldman's board of directors to revisit succession plans, which may have already required tweaking after the recently announced retirement of Michael "Woody" Sherwood, another potential heir to Blankfein. Still, it's not as if the bank is lacking for candidates to groom into Cohn's role: Other potential successors cited by analysts and the financial press include Harvey Schwartz, the chief financial officer; David Solomon, co-head of investment banking; Stephen Scherr, chief strategy officer; and Pablo Salame, co-head of securities. 

Still, Goldman's investors aren't perturbed by a potential executive shuffle. The bank's shares gained an additional 3 percent on Wednesday and are now at their highest level since 2007, thanks to a 20 percent rally since the election that has made it the best performer in the Dow Jones Industrial Average. 

Thanks, Donald
Since the U.S. election, Goldman Sachs has been the best performer of the Dow Jones Industrials Average
Source: Bloomberg

At a forward price-to-earnings multiple of 12.3, some analysts think Goldman's shares are now overvalued even though it's below the bank's five-year average of 13.2.

Where to From Here?
Wall Street analysts think Goldman's shares could be trading at anywhere from $120 to $245 this time next year
Source: Bloomberg

That idea may soon be unwound. The firm's alumni are poised to take meaningful roles in Washington that would give them a direct hand in stimulating the U.S. economy, which would benefit not only Goldman but its peers. "Considering that Cohn is a general supporter of capital markets, I would expect Goldman to perform reasonably well," UBS analyst Brennan Hawken told Bloomberg Gadfly. 

Unlike the speculated nomination of JPMorgan Chase & Co.'s CEO Jamie Dimon as Treasury secretary -- which sent that bank's stock sharply lower despite the unrealistic prospect -- it seems as if Cohn's departure from Goldman is well within the realm of possibility.

Accepting a role would allow Cohn to divest his Goldman shares -- valued at some $190 million -- and defer capital gains taxes, providing the opportunity for a harmonious exit. Given that Blankfein seems unlikely to call it a day anytime soon and the risk that Cohn may be passed over anyway, it shouldn't come as a great surprise if he picks the White House over 200 West Street. He would see some familiar faces, and investors don't seem to mind. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(Corrects tax treatment on capital gains of divested shares in the last paragraph of a column first published on Nov. 30.)

To contact the author of this story:
Gillian Tan in New York at

To contact the editor responsible for this story:
Daniel Niemi at